In our view, the predictability of Hungary's policy framework continues to weaken, harming Hungary's medium-term growth prospects. We are therefore lowering our long- and short-term sovereign credit ratings on Hungary to 'BB+/B' from 'BBB-/A-3' and our long-term counterparty credit rating on the National Bank of Hungary (the central bank) to 'BB+' from 'BBB-'. We are also removing all ratings from CreditWatch negative, where they were placed on Nov. 11, 2011. We are assigning a recovery rating of '3' to Hungary, which reflects our assessment of "meaningful recovery" of 50%-70% in the event of a sovereign default. The negative outlook reflects our view that there is at least a one-in-three possibility of a downgrade over the next year if we see
